Guatemala has become the first country to join the EFTA-Central American Free Trade Agreement (FTA), in a move that will help enhance economic ties and promote trade and investment between the country and EFTA states.

Ministers from the Member States of the European Free Trade Association (EFTA) – Iceland, Liechtenstein, Norway and Switzerland – and from Costa Rica, Guatemala and Panama signed the agreement in Schaan, Liechtenstein, on 22 June.

The deal builds on a Joint Declaration on Cooperation signed by the EFTA States and Panama in July 2010. Negotiations between EFTA and four central American states were launched in November 2011 and concluded with Costa Rica and Panama in December 2012.

Negotiations with Guatemala were concluded in November last year, while negotiations with Honduras are currently on hold.

The EFTA-Central America FTA was signed by the EFTA States, Costa Rica and Panama in June 2013 and entered into force in August 2014 for Costa Rica, Panama, Norway Liechtenstein and Switzerland, and September 2014 for Iceland.

Total merchandise trade between the EFTA States and Guatemala was valued at US$121m in 2014, with EFTA’s exports to Guatemala amounting to $49m and imports valued at $72m.

The accession of Guatemala will become effective following completion of the necessary internal procedures by all parties.

Click here to read about Guatemala's apparel and textiles industry as it looks to win more US sourcing business.